Strand 3: Building a Stronger Funding Ecosystem

How do we create a funding ecosystem that is more connected, data-driven and collectively responsive to what communities need? This strand explored how funders can create a funding ecosystem that is more connected, data-driven and collectively responsive to what communities need. Across the sessions, discussions returned to a shared question: how can funding systems move away from paternalistic, fragmented and process-heavy models, and towards approaches that are more relational, equitable, coordinated and responsive to the realities of communities and civil society organisations?

Sharing power in decision-making  

A recurring question across sessions was who gets to decide how resources are used. Older charitable assumptions still echo in modern funding processes. As Camden Giving's Escaping Victorian Philanthropy session showed, application forms, heavy reporting and technical language can all reproduce power dynamics - requiring communities to prove themselves to those holding the money. Community Southwark's session on what a joined-up approach to capacity support could look like offered one answer: an accessible, transparent grant process, where groups made funding decisions collaboratively, with the process refined continually through participant feedback. Through this pilot, "Funding Differently", grassroots organisations scored one another's applications rather than leaving decisions solely to funders or trustees. This model was developed in response to a State of the Sector report, which identified access to funding as the greatest barrier facing small community organisations. 

Several sessions showed that participation is most meaningful when it carries real authority, a theme that also ran through Strand One. Cripplegate's session on endowment investing looked at the Future Generations Panel: seven 18–25 year olds who co-designed criteria, scored and shortlisted proposals, and made a formal recommendation shaping decisions on a £50 million mandate. Institute for Voluntary Action Research (IVAR), the learning partner for Propel – a long-term funder collaboration coordinated by London Funders – showed how funders moved from  “led by and for” thresholds to embedding equity and youth assessors in decision-making. Across these examples, the strongest models did not simply consult communities; they worked in partnership with them, which ultimately led to more effective funding decisions. 

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The value of trust, relationships and lived experience: Seeing beyond applications and metrics 

Across sessions, speakers challenged the idea that formal applications, metrics or professionalised language are the only credible ways to understand impact. In Southwark, community leaders shared how deep local relationships can reveal work that conventional due diligence might miss. A community leader in Southwark who had struggled with written applications because of dyslexia, was able to secure funding once a simplified process was offered. Community Tech – an organisation based in Southwark – described core funding from United St Saviour’s as valuable, not just because of the money, but because it came through a relationship of trust and gave the organisation “breathing space” to plan. In the session on blended capital led by Figurative, School for Social Entrepreneurs (SSE) & The Equality Impact Investing Project, panellists identified non-financial support – peer support, cash-flow forecasting and governance help – as essential alongside funding itself. SSE highlighted the particular value of longer-term peer groups, for developing expertise and providing emotional support. Alongside building trust and relationships externally, building relationships within organisations is key in working towards equitable decision making for community groups.  

Getting Funder Plus right 

During the session on a more joined-up approach to capacity support, speakers recognised that systems change requires funding the conditions that make change possible, but also warned against additional, non-financial (‘Funder Plus’) support that might burden overstretched organisations.  

“Support done poorly can do more harm than good” 

Instead, they called for embedded, tailored help that builds resilience and provides the time and space for organisations to learn and grow. It needs to be proportionate, and tailored to each organisation. 

“We can't have a one-size vessel approach for the support that we provide” 

During the blended capital session, EEIP shared that a survey of 109 organisations showed widespread dependence on grant funding despite strong aspirations to diversify income. Although 78% wished to increase trading income, around half were unaware that enterprise development grants existed, and only 12% had ever been approached by such funders, illustrating a significant information and outreach gap. Panellists called on funders to embed social finance within their impact strategy and consider what it might mean for different forms of funding - grants, loans, match trading, equity-oriented investment - to work together rather than in silos.

Making funding more accessible 

Sessions also explored barriers within funding systems such as the expectation to use the ‘right’ language. New Philanthropy Capital’s session highlighted how organisations may be tackling “social cohesion” without ever using that term – meaning a narrow focus on language can make important community work invisible. AI also came up repeatedly, appearing as both a practical tool and a risk. Funders reported seeing more generic, AI-written applications, and organisations struggling to convey their story and impact authentically. For funders in Southwark, this prompted interest in conversations and site visits instead of written forms. On the use of AI, NPC took a more systemic view, pointing out that AI and semantic tools can help funders process large volumes of data and identify relevant organisations without having to rely so heavily on the language used in applications. Whilst identifying an opportunity for AI to support sense-making, speakers reiterated that AI should not replace relationships or accountability, and that human interpretation and judgement must remain central. Global's Make Some Noise offered one example of this in practice. This summer, they're piloting a programme in which a human and an AI independently score the same applications, before comparing the two sets of results. 

On other barriers, such as inaccessible language or lack of experience with formal bid writing, funders and partners discussed alternative ways of working which treat funding as a journey rather than a transaction. Suggestions included staged application questions to help break application forms down, video submissions, translation support, conversations and site visits. 

Collaboration and collective action: Working together, not in parallel 

Collaboration appeared as a key route to scaling initiatives, with the recognition that this requires time, governance, trust, and navigating misaligned funding cycles. IVAR’s session on the Propel collaboration showed how shared principles around equity, flexibility, and accountability can anchor collaborative funding. However, it also showed that alignment does not automatically create a joined-up experience for grantees - even within an aligned collaborative fund, reporting requirements and grant terms still varied by individual funders.  

“Building a more effective and equitable funding ecosystem requires investment… in building an infrastructure that can hold space for reflection, decision-making, tension, adaptation, flexibility.” 

In a session on how philanthropy can work more effectively alongside government, The Blue Thread shared reflections on the Family Courts Collaboration, which came together to address how domestic abuse victims are retraumatised in private law proceedings. This was a relatively modest, pooled investment of around £15,000 per funder for consultancy work. That work led the consultants to form a charity, which went on to receive £1 million in further investment. This collaboration resulted in legislative change by influencing an amendment to the Courts Act - proof that funders acting together can shift policy. It also funded a behavioural insights training module for police focused on shifting policing practice from a transactional to relational approach, which was later integrated into national performance frameworks. During the Investing with Intention session, Friends Provident Foundation shared how the Future Generations panel - where young people helped shape investment decisions - was part of a larger ambition. Collaborating with partners was key to giving them the confidence to take this new participatory approach.  

Taken together, these examples point to something bigger than any single collaboration. A modest pooled investment led to legislative change, and elsewhere, collaborating with other funders gave one funder the confidence to adopt a participatory approach to investment decisions it likely wouldn’t have risked alone. That's the case for a more joined-up ecosystem: not just as a way of pooling money, but as a way of using the sector's collective resources more efficiently, and acting with a shared sense of purpose rather than in parallel.

The role of philanthropy alongside government 

Across the programme, the role of funders was repeatedly broadened beyond financial support. Because foundations can act faster and absorb more uncertainty than statutory systems, speakers at the philanthropy and government session urged them to use that freedom. The session framed national government, local government and foundations as “three spiders working on the same web”: each can contribute, but they operate at different speeds, with different risk appetites and limited visibility of one another. Funders were called on to engage with policy and commissioning, using evidence and convening power to shape and influence decisions. The philanthropy and government session also raised a warning: philanthropy can pilot, convene and take risks, but in addressing statutory gaps, it should be careful not to become a permanent substitute for public responsibility. Rather, funders should act as conveners, risk-takers, policy influencers, and critical friends.  

“It is a risk not to take a risk.” 

What we’re taking forward 

Taken together, the sessions suggest a sector in transition: moving away from top-down, siloed and administratively heavy models of funding, and towards approaches that are more relational, participatory, transparent, coordinated and adaptive. But this transition is still uneven. Good practice is often happening in pockets — a collaboration here, a participatory pilot there — without funders always being able to see how their own work connects to what else is happening across the sector, or acting with real collective purpose as a result. 

The Festival sessions pointed to what closing that gap can look like in practice: funders working in the same space sharing data, insight and information about what they’re funding, so they can spot duplication and opportunities to complement each other; pooling investments to unlock change that no single funder could achieve alone; and funders finding the confidence to take risks together. 

Building on this means funders treating collaboration and intelligence-sharing as standard practice, not the exception: sharing data and learning alongside community knowledge and insight rather than holding it separately, and seeing their own work as one part of a bigger system rather than the whole of it. That shift — from acting well individually to acting well together — is what will let this transition move from pockets of good practice to how the sector works as a whole.